Friday, August 12, 2005

The cost of Blair's vanity

Recently, I published piece under the title "the price of collaboration", pointing out that the UK government's participation in the abortive "Trigat" European anti-tank missile projects had cost us £314 million before we abandoned them and bought off-the-shelf US missiles.

As always though, this has turned out to be the tip of the iceberg and, with further research, it looks like the "Europeanisation" of our defence policy has so far cost us over £1 billion and looks set to cost us many billions more. And for the privilege of paying considerably more, we will end up with an inferior military capability.

One of the earlier cash drains was a project called the Multirole Armoured Vehicle (MRAV), a collaborative programme with the Germans and the Dutch. Hailed at the time as "a major boost to the European defence industry… a prime example of… collaboration with our allies," it was signed in November 1999 for the collaborative development and initial production of the family of next generation armoured utility vehicles.

However, the UK pulled out in July 2003, losing £48 million in the process, when it decided to pursue the FRES concept. MRAV – by then renamed the "Boxer" - at 31 tons per vehicle, was too heavy for the C-130 Hercules air transport needed for "rapid reaction" operations envisaged for FRES.

By defence procurement standards, of course, a mere £48 million is small beer, although it is still real money and it was poured down the drain. We got nothing at all in return.

In a slightly bigger league is the Panther debacle, where the MoD spent £166 million on 401 armoured Italian SUVs when, for £40 million we could have had the equivalent M1114 up-armoured "Humvees" – an excess expenditure of £126 million.

However, behind the Panther story is an even more fascinating tale as this was bought after the cancellation of a joint Anglo-American Project called TRACER/FSCS, started in 1996 to develop a high-tech tracked reconnaissance vehicle. In February 2000, however, the project was cancelled when the US Congress shifted funding to a more ambitious, all-embracing concept known as the Future Combat System (FCS).

The British government chose not to join in this venture, pulling out to develop FRES, losing £131 million that it had already spent. Within the framework of FCS, the US went on to develop the vehicle, known as the Sika combat vehicle, while we went on to buy the Pather which, supposedly does the same job.

On just those four projects, therefore – MRAV, TRIGAT, Panther and TRACER, we have blown just short of £620 million, for absolutely no gain at all.

This sum, however, pales into insignificance, against the costs of FRES, currently estimated at £14 billion – the largest Army re-equipment project in history. The US, on the other hand, is spending $120 billion on FCS – the project that we chose not to join. But, while we aim to equip three Brigades for our money, the US is planning to equip 36 with theirs.

By my reckoning, therefore, we will be paying £4.6 billion per Brigade, compared with £1.8 billion for a US Brigade, two-and-a-half times more than the US for formations which will not actually be as well equipped. Notionally, co-operation with the Americans - from which we withdrew - would have given us bigger bangs for fewer bucks: less than £6 billion as opposed to the projected £14 billion.

There is also, seemingly, another major loss-maker in the offing, in the form of a £10bn project called the "Future Offensive Air System" (FOAS). In a situation which has some parallels with TRACER, the UK has been working for the last seven years with the US on producing a high-tech Unmanned Combat Aerial Vehicle (UCAV) by around 2018 when the RAF's fleet of Tornado GR4s is expected to reach the end of its operational life.

Once again, however, this time in June 2005, the British government pulled out of the project, even though the "definition phase" was not due for completion until 2008. As yet no loss has been declared, though it is likely to be substantial and, meanwhile, the UK government is thinking about joining the French in its "Neuron" UCAV project – at an unspecified cost.

The one thing we do know about joint French projects, though, is that they always cost us a lot of money and – especially with missiles, as in Trigat – they do not always work.

Nevertheless, we have gone ahead with another joint project to produce the Meteor long range air-to-air missile to equip the Eurofighter. Supposedly offering advanced technology, its cost is estimated at £1.4 billion, chosen in preference to the "extended range" missile produced by US arms manufacturer Raytheon at a cost of £500 million. Although theoretically less capable, it had the merit of being a development of a battle-proven system, but Blair has chosen the "European" route.

Predictably, this has backfired. Although the Meteor was supposed to be in service in 2005, to match the introduction of the Eurofighter, it is now not expected to come into service until 2012 – at the earliest. As a stop-gap, therefore, the MoD has had to spend £200 million on Raytheon missiles, to give Eurofighter pilots something to play with. By my reckoning, therefore, the Meteor project – if it works - will have cost the taxpayer £1.1 billion more than the US option.

Just to tidy up the accounts, there is also the cost of the totally unnecessary Galileo global positioning system which will have cost the British taxpayer about £400 million by the time it gets into orbit, and – to add insult to injury – the Commission has recently announced a defence research programme, our contribution to which is at least £120 million, while most of the work will go to the French.

And all this because, at St Malo in 1998, Tony Blair wanted a seat at the European "top table" and offered to kick-start European defence integration in exchange. We cannot afford the cost of his vanity.